LONDON/NEW YORK, Oct 22 (Reuters) - BHP Billiton,the world's largest mining company, plans to sell roughly halfits acreage in the Permian Basin - a revived oil and gas regionin Texas and New Mexico - as it focuses on its most lucrativeassets there.
BHP, already a significant oil and gas player, moved heavilyinto U.S. shale in 2011, acquiring Fayetteville assets from U.S.energy group Chesapeake and months later later PetrohawkEnergy, spending almost $17 billion - $20 billion, includingdebt - just before a major downturn in U.S. natural gas prices.
The mining giant, also faced with cooling prices for its keymined commodities, has since been trimming across its divisionsto focus on its more profitable core operations. It confirmed onTuesday it was selling down in the Permian Basin to concentrateon acreage there that "holds the most interest".
"The drilling program has now defined our primary area offocus in the basin and, while this program is at a relativelyearly stage, we see the potential to build a sizeable business,"a BHP spokeswoman said.
"As we continue with our evaluation, we will concentrate ourefforts on the acreage that holds the most immediate interestfor us while divesting some other parts of our holdings."
According to a request for proposals from adviser ScotiaWaterous and dated Oct. 16, BHP is selling 250,000 net acres inwest Texas - 165,000 net acres in the Delaware Basin and theremainder in the Midland Basin.
That compares to BHP's total of 500,000 net acres in thebroader Permian Basin, according to its latest annual report.
BHP declined to comment on how much of the acreage up forsale came from the 2011 Petrohawk acquisition, which gave BHP325,000 net acres in the Permian, described at the time asprimarily oil, highly scaleable and with "significant upsidepotential". The remaining acres were acquired separately.
- Oil, Gas, & Consumable Fuels
- Commodity Markets
- BHP Billiton
- Permian Basin